4/10/2024
In March 2024, the Superior Court of Justice advanced its judgment on the interpretation of Article 406 of the Brazilian Civil Law regarding the indexation and interest rate applicable to civil debts.
The reporting judge of the appeal, Justice Luis Felipe Salomão, considered that the formula of monetary correction by inflation – IPCA-E index – plus interest of 1%, the standard most commonly observed in practice until then.
However, by a majority of votes, the prevailing thesis was that the economy’s basic interest rate, known as SELIC, should be applied to civil debts.
The conclusion of the judgment is pending of questions of order that have been made about the winning thesis, but it is likely that SELIC adoption will be the final result of the judgment, producing important effects in practice.
